Your Questions About Stocks And Bonds

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Robert asks…

Stocks, bonds, etc.– what is the safest way to invest?

I’ve heard of diversifying and that some investments (like savings accounts and CD’s) simply earn interest and are supposedly completely safe, particularly if FDIC insured, but I know little about stocks, bonds, and other types of investments. What do you consider the safest investment(s) and in what combination?

financi4 answers:

What is safest depends on your time horizon for this money. Short term 5 years or less, CD’s are safest (go to for the highest CD rates in the nation). But over the long term (10+ years) you won’t be losing money with CD’s but in relation to inflation, you may lose value, or buying power. The CD return over the inflation rate may be very low. Long term, common stocks have been seen by many to give the “best” risk/return ratio. If you are very conservative and have trouble sleeping at night holding all common stocks, spreading the risk around may be the answer. Two choices may be: 1) having 30% of your money invested in Vanguard’s Total Stock Market index mutual fund (covers the entire USA stock market), 30% in Vanguard’s Total International Market index fund (covers the rest of the world) and 40% into government bonds or FDIC insured CD’s. (percentages are adjustable so you can get a good nights sleep. The 2nd choice would be some form of “guaranteed” annuity. Be advised with annuities, fees are high, returns are lower than regular mutual funds and the guarantee is only good as long as the insurance company stays in business (New York state has the toughest regulations concerning insurance company safety, so if you go this route, try to get an annuity from an insurance company that also does business in New York State.).

Ken asks…

Where is the best place to learn about investing in stocks, bonds etc?

I have about $20k and I would really love to learn how to play in the trade – stocksbonds etc. I did find a website that offers a free intro to internet self trade – but it sounds a bit fishy. How do the big guns learn? Is it a university degree? I am from Australia. I tam willing toput in the hard yards, but dont know where to start!! HELP!

financi4 answers:
and read any and all Benjamin Grahams books
main two are called the intelligent investor and security analisys

David asks…

How do stocks/bonds and all that stuff work?

I have “some” money saved (not much) but I heard about stocks & investing money rather than just have sitting in my acct earning a couple of pennies interest a year… I have no idea whatsover about these things…Please explain like if I’m a 5 yr old.

financi4 answers:

In addition to engineer’s answer, I suggest going to

This is a free site AND its one of Y! A’s “knowledgable contributors”.

There are virtually thousands of books and countless articles written about investing in the market.

Here are some of the things I learned:
1] Contrary to what anyone might tell you or what you hear, you don’t have to learn everything about the market. All you have to learn, become knowlegeable about and be comfortable with are 3 to 6 different strategies.

Trading is a very emotional venture. As far as I’m concerned and what I was recently taught:
2] Paper trading or virtual trading isn’t all its represented to be. When first trading, paper trading or virtual trading is a wonderful tool.

To get the full emotion and your attention, just buy a few shares of a stock. Don’t put your whole account or entire portfolio on the line.

3] Penny stocks are very, very, very risky and volatile.

Most folks think its a great way to earn fast, easy money. Believe me: Its not.

The ONLY thing penny stocks are good for is to get folks to part with their hard-earned money.

A few sayings about Wall Street:
There aren’t any gifts on Wall Street!

Trees don’t grow to Heaven. Neither do stocks!

Bulls [Buyers] earn money!
Bears [Sellers] earn money!
Pigs get fat!
Hogs [Greedy traders] get slaughtered!

Plan the trade AND trade the plan!

When a trader breaks his/her trading rules, he/she runs the risk of breaking his her trading account!

Thanks for asking your Q! I enjoyed taking the time to answer it!

Ron Berue
Yes, that is my real loast name!

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